A few weeks ago, I introduced my perspective on the significance of a customer experience framework and how it can help an organisation to focus its customer experience efforts (http://ijgolding.com/2013/03/26/strategy-measurement-people-a-simple-framework-for-managing-customer-experience/)
The framework I personally deploy when working with an organisation has three core components – STRATEGY (or proposition); MEASUREMENT (or facts); and PEOPLE (or engagement and advocacy). In this blog post I want to expand on the importance of the MEASUREMENT component, and how you can go about arming your business with THE FACTS it needs to become truly customer focussed.
Firstly, let me just clarify why understanding the facts is so fundamental to any organisation that aspires to have a customer focus. All businesses, large or small, B2B or B2C, possess a huge amount of data. Businesses use this data to produce report after report and KPI after KPI. Senior leaders use these reports and KPIs to run their businesses. They will use them to determine the performance of their staff. They will use them to determine the performance of the business strategy. From my experience, much of the time, the reports and KPIs that are produced in great number are generally missing something quite vital – any link to the customer!
To test this statement, and what I am saying I have experienced, let me ask you three important questions:
- Is ‘customer’ on the agenda of your regular business meetings (from board level down)?
- Is a customer metric(s) included in your performance management process and/or incentive programme?
- Are the metrics used to measure business performance related to anything the customer would deem important?
If you have been able to answer yes to these questions, you are definitely in good shape when it comes to deploying what I would describe as a customer focussed measurement system. If you cannot answer yes, or know of organisations that cannot, you will understand what I am referring to when I describe organisations who make decisions ‘without having all the facts’.
Organisations who do not know all the facts, or who have the ‘customer piece of the jigsaw’ missing, are taking a big risk. They will be reacting to issues not fully understanding what the cause of the problem is. They will be making judgements as to what customers want and need. They will potentially be investing money and resources in products and processes that are not significant to their customer. It is not a surprise that the organisations that usually tend to fail are the ones who have not understood what it is they need to do to continuously meet their customers’ needs.
Implementing a customer focussed measurement system as part of a customer experience framework will complete the often missing piece of the jigsaw. It will provide invaluable insight and understanding into what it is the business needs to focus on to improve customer perception. So how do you do it? Let me talk you through the four steps to deploying a customer focussed measurement system.
STEP 1 – UNDERSTAND YOUR CUSTOMER JOURNEY
Before you are able to implement the right customer focussed measures, you must first understand what it is you are measuring! It has become very fashionable over the last two to three years for companies to create customer journey maps. Visualising and understanding the customer journey is a very important step in any customer experience framework. Understanding the journey and the key touch points or ‘moments of truth’ within it allows you to understand what it is that needs to be measured. Customer journeys can be very simple and very complicated. I always advocate the ‘keeping it simple’ method. Here are two high level examples of ‘getting started’:
Once you understand the key ‘stages’ of your journey, you can then drill down to the next level – identifying the touch points or moments of truth. Once you have done this, you are ready to move to step 2.
STEP 2 – UNDERSTAND HOW CAPABLE YOUR BUSINESS IS IN DELIVERING THE CUSTOMER JOURNEY
Understanding your customer journey and the key touch points within it, enables you to start contemplating how able you are to measure the effectiveness of it. Going back to what I described earlier on the subject of KPIs, how many existing KPIs in your business relate to the customer journey and the interactions customers have throughout it? Without needing to know the answer, I can confidently assume that many of you reading this will not be able to answer this question positively. Implementing a customer focussed measurement system is not just about understanding customer perception. Your customer journey will deliver a CAUSE and EFFECT relationship. Your ability, or not as the case may be, to do what you are supposed to do at every customer interaction will be the CAUSE that will determine customer perception of that interaction. Customer perception is the CAUSE. Understanding how capable you are at doing hat you are supposed to do will enable you to a) determine how far away from ‘perfection’ your customer journey is, and b) act as a predictor of customer perception. If your capability drops this month, you will almost certainly be able to predict that customer perception will also drop the following month.
I strongly advocate the introduction of a customer focussed index that acts as your internal customer metric. The index known as the OMI or ‘operational measures index’ allows you to measure the gap between current state and perfection – perfection is defined as the level that you aspire to get each customer touch point to. If the OMI were to be 100%, all touch points would be as perfect as you aspire them to be. Below is an example of how an OMI dashboard might look for a vehicle rental business (number of journey stages and metrics is dependant on the business):
STEP 3 – UNDERSTAND CUSTOMER PERCEPTION
Understanding customer perception is a step in deploying a measurement system that most people are relatively comfortable with – and as such, one I will not dwell on too much. Many organisations have customer feedback mechanisms in place. Whether they be driven by Customer Satisfaction (CSat), or Net Promoter Score (NPS), it is obviously essential to understand what your customer actually thinks about your relationship with them. It is important that you do measure the relationship as well as individual transactions. Aligning your internal metrics (step 2) with customer perception will allow you to have a clear understanding of what may be causing the problem. At the end of the day, one of the key objectives of any customer experience programme must be to identify what your priorities are to improve customer perception, which in turn will lead to greater loyalty, revenue and profit.
STEP 4 – CONTINUOUSLY IMPROVE THE CUSTOMER JOURNEY
This all leads to the fourth step – and perhaps the most important. A customer focussed measurement system as I have described, will give your organisation invaluable insight. This insight will enable your business to clearly understand what it needs to do to better meet customer expectation. Embedding a continuous improvement programme to address the ‘priorities’ for improvement from a customer perspective will ensure that the insight you are capturing will provide the focus your business needs. Most pieces of work to improve a business should sit in one of two camps:
1. Keeping the lights on (infrastructure, technology etc..)
2. Improving the customer journey
If your business is focussing resource and investment anywhere else, it should question why. Continuous improvement in your customer journey is what will ensure the sustainability of your business. If you keep measuring the right thing, and addressing the priorities that come out of your measurement system, you will be constantly adjusting to the changing needs of your customers
So – 4 steps to deploying a customer focussed measurement system. It all starts and ends with the customer journey – just as your customer would like it to!! As always, your comments on any part of this blog post are most welcome.